Some legislation underpinning the SDR already applies to FCA-authorised firms:

• Anti-green washing rule and guidance to prevent misleading sustainability claims
• Labelling regime for investment products with sustainability objectives
• Guidance and requirements for product and entity-level sustainability disclosures (consumers and institutional investors)

Current implementation

With significant progress to implement the SDR measures already made, what should real estate asset managers be aware of?

TCFD and SDR regulations

Since 2023, all firms with AUM over £5bn are required by the FCA to publish product and entity-level annual climate disclosures, aligned with the recommendations from the former Taskforce on Climate-related Financial Disclosures (TCFD).

SDR builds on the existing TCFD rules; firms producing annual entity-level SDR reports must provide a hyperlink to separate TCFD statements, or consolidate both disclosures.

Streamlining coming?

The UK Government published its final Sustainability Reporting Standards (SRS) S1 and S2 disclosure frameworks in February 2026. Based on the International Financial Reporting Standards’ (IFRS) S1 and S2 disclosure guidance, the SRS requirements have been adapted to reflect the requirements of UK-specific companies and investors. 

The aim is to provide a single sustainability disclosure framework, reducing the administrative burden and enabling UK firms to compete transparently in the global sustainable finance market. The SRS is expected to replace the FCA’s current TCFD regime for listed companies following the current consultation. If enforced, the current scope of disclosures will be extended from climate-risk to include general sustainability indicators.

Preparation

Now is an opportunity for firms captured by TCFD and SDR, including asset managers, to start capitalising on the opportunities. We recommend a staged approach:

1. Materiality assessment: Identify which sustainability matters are important to both internal and external groups.
2. Objective setting: Based on the materiality assessment, consider which objectives help evidence your progress.
3. Data management: Review your approach to sourcing, analysing and preparing relevant data to evidence how you manage sustainability-related topics and targets.
4. Disclose: Prepare a robust and replicable reporting strategy, balancing compliance and stakeholder interests.

Further information

Contact Tom Bardwell or Sarune Ringelyte

Identifying physical climate risks and resilience opportunities across the property lifecycle